Will Charities Suffer From The Proposed AMT Legislation?

The alternative minimum tax ("AMT") was first introduced in 1986 to ensure that individuals and trusts pay some amount of minimum tax where they otherwise would not (or would pay what was perceived to be an insufficient amount) due to tax preferred forms of income such as gains from qualified small business corporation shares, qualified farm or fishing property, eligible dividends, etc., or by the use of certain preferred deductions or tax credits. While there have been minor tinkering with the AMT since its introduction, the architecture of the AMT has remained the same since its introduction. Well, that is about to change.

The 2023 Federal Budget (the "Budget") proposed changes to the AMT – to take effect for the calendar year 2024 and beyond – to attempt to "better target high-income individuals". The 2023 Budget proposals were a follow-up to a 2021 Liberal Party election promise to introduce a 15% minimum tax and a 2022 Federal Budget promise to release